Alberta’s largest unions warn of cuts to public service

Days ahead of the provincial budget, Alberta's largest unions are calling on Premier Alison Redford to avoid Ralph Klein-like cuts to the public service in a bid to balance the books.

Speaking jointly in Edmonton Monday, Alberta Federation of Labour (AFL) president Gil McGowan said Ms. Redford's warnings of "tough choices" in Thursday's budget – which is expected to cut some services, abandon other earlier promises of increases and still deliver a deficit – amounts to "something close to a betrayal" for a premier who campaigned on preserving services and social programs.

"There's absolutely no doubt we're disappointed with Alison Redford, and frankly we think most Albertans should be disappointed as well," Mr. McGowan said, adding the premier's "promises and reassurances are starting to ring hollow."

Mr. McGowan was joined Monday by leaders from the Alberta Union of Provincial Employees (AUPE), the Alberta Teachers' Association (ATA), the United Nurses of Alberta (UNA) and the Health Sciences Association of Alberta (HSAA). Altogether, they represent over 160,000 public employees in the province.

Under Mr. Klein, who famously slashed public services two decades ago to balance Alberta's budget, union uproar would hardly be surprising. But Ms. Redford has relied on union support in both her campaign for her party's leadership and last year's provincial election. She's since had to backtrack on funding promises and has been locked in bitter contract battles with doctors and teachers.

Debt-free Alberta is poised to table what's expected to be its sixth consecutive deficit budget on Thursday, despite a strong economy, steady growth and low unemployment. In explaining Alberta's inability to balance its budget during a boom, Ms. Redford has pointed to what she's called a "bitumen bubble," referring to the "differential" between global benchmark oil prices and the lower price Alberta's oil sands bitumen fetches. The differential customarily fluctuates, but has widened lately.

Ms. Redford has said the "bitumen bubble" crisis was unforeseen, though industry had warned about it for years and the province's past budget documents predicted the discount would be, in fact, larger than it is now. The labour leaders, as such, dismissed the "bubble" as a misnomer.

"I think that's part of the whole game, to create that sense of panic," said AUPE President Guy Smith, adding: "Those of us who were around in the Klein years, the early 90s, are beginning to smell it in the air again a little bit."

Even if funding for a program holds steady, it's a de facto cut in the fast-growing province, ATA vice-president Mark Ramsankar said. Without previously promised education increases of 2 per cent, which are now in doubt, "we'll see 12,000 students wedged into classrooms [next year] with no funding or services to support them," he said.

Ms. Redford has said Alberta needs to totally overhaul its fiscal formula, but has been vague in how she plans to do that. "I think we have the opportunity to change the parameters of the discussion about what the future of this province looks like," she said in a speech last week.

That means cuts, tax hikes, borrowing or some combination thereof. Ms. Redford already plans to take on billions in debt to pay for infrastructure, but has ruled out borrowing for operating expenses. The province has frozen salaries of its managers and said it will cut about 10 per cent of those positions over three years. Raising taxes in this particular budget, she has said, "is taking the easy way out."

But Albertans have little appetite for cuts, according to an Environics Research Group poll commissioned by the AFL and released Monday. Of 1,014 respondents, 73 per cent saw no need for public service cuts.

Instead, to make ends meet, 77 per cent favoured higher taxes for corporations and the rich, while 72 per cent feel Alberta should reintroduce a progressive income tax, where the rate increases for higher earners, and that the province should hike oil royalties.

Alberta is the only province without a provincial sales tax, and the poll shows little appetite for that to change: 82 per cent were somewhat or strongly oppose introducing a PST. The poll is considered accurate within 3.1 per cent, 19 times out of 20.

All told, it means voters aren't buying into the crisis the Redford government is trying to raise the alarm on, argued Elisabeth Ballermann, president of the HSAA, which represents a total of 23,000 health care workers. "Albertans aren't buying it. Albertans are saying we should be able to afford this," she said.

Ms. Redford won a majority in last year's spring election by steering her party to the centre and fending off the right-wing Wildrose Party, which she argued would hurt Alberta by cutting spending on social programs and infrastructure. Now she finds herself considering similar moves.

"Albertans who elected this government believed they were not electing a Wildrose policy government," UNA President Heather Smith said. "In fact, I've heard people say, if what we're going to get is Wildrose policy, maybe we should have just voted for them, right? [Ms. Redford's Progressive Conservatives] weren't elected to do the kinds of slash-and-burn to social programs," that labour leaders now fear.

The legislature is scheduled to resume its session on Tuesday, with the budget coming two days later. Ms. Redford's government has signalled it will split the budget into an operational plan, capital plan and spending plan. It will borrow for capital project to avoid what the premier calls a "social infrastructure deficit," or a shortage of schools and hospitals as new residents flock to her province.